Bolivia is one of the many countries which has faced decades of repression. The consequences of tyranny slowly took over in Bolivia, which left the economy (the system of production, distribution, and consumption) unstable. The misguided economy due to overspending was lead into great debt (an obligation to repay a sum of principal plus principal). The economy was spending thirty times more than what it received in taxes. This resulted in a debt crisis which lead to drastic hyperinflation (the increase in the volume of money related to available good and services resulting in a continuing increase in general price levels) , inflation rates which were over 23,500% (www.pbs.org). In Bolivia, prices (value expressed in terms of money) increased at an average of one percent every ten minutes. The economy, as appalling as it was, was so horrid that seven out of every 10 Bolivians lived in poverty.

World map showing inflation, updated for 2009. Gre...

English: Insulin shock therapy is given in Lapinla...

Português: Jeffrey Sachs no Palácio do Planalto ...

Bolivia soon adopted 'Shock Therapy'(the sudden release of price and currency control, withdrawal of state subsidiaries, and immediate trade liberalization within a country. Shock therapy's main proponent for many emerging economies was Jeffrey Sachs) and continued with the process taking three steps. With an inflation rate at an all time high of 60,000 percent (www.pbs.org), the only solution to reduce this colossal rate was by putting an end to printing enormous sums of money from the Central Bank (an institution which handles savings and checking accounts, issues loans, and credit and also deals in government and corporate issued securities). This helped stabilize the currency (any kind of coin or paper money used as a medium for exchange) and budget scarcity; the government spent no more than what it had- overspending was put to an end.

Bolivia was rich in oil, a natural resource (a gift of nature) and 'Shock...

Citation styles:

Evaluation of Shock Therapy in the Bolivian Economy.. (2005, August 28). In WriteWork.com. Retrieved 02:45, March 20, 2018, from http://www.writework.com/essay/evaluation-shock-therapy-bolivian-economy

More Case Studies essays:

... percent of U.S. households, and C-SPAN2 is received by over 41.1 million or 46 percent of U.S. households. C-SPAN is distributed ... One recent innovation of C-SPAN is the C-SPAN school bus. This is a full-sized tour bus that contains a complete video production ... ' famous Lincoln papers. 'America and the ...

... production of crude oil and natural gas; refining, marketing, supply and transportation; and manufacturing and marketing of petrochemicals. We have a growing activity in gas and power and in solar power generation. BP has well-established operations in Europe, North and South America ...

... page that listed eleven open job positions at various companies throughout Central Florida. Scrolling down the page, I recognized the school director position opening ... enhance what is available. There will always be room for more than one method of recruiting. The bottom line is, no service can be ...

... Unlike Coffee Bean, Starbucks does not personalise their coffees or have different products to suit different countries' tastes. Coffee Bean offers more food meals (pastas ... every city that has a store, Starbucks sets up at least one shelter for the underprivileged children and donates money as well. ...

... one. This was greatly due to dropping market share and consumer protest. The market share fell from a high of 15 percent to a low of 1.4 percent(Miller 38). Roberto Goizueta and Donald Keough took full blame for this failed product ...

8 pages428Jan/19963.0

Students & Profs. say about us:

"Good news: you can turn to other's writing help. WriteWork has over 100,000 sample papers"